Which equation calculates total surplus
A)Total surplus = Value to buyers - Amount received by sellers + Amount paid by buyers - Costs of sellers
B)Total surplus = Amount received by sellers - Value to buyers + Amount paid by buyers - Cost of sellers
C)Total surplus = Value to buyers - Amount paid by buyers + Amount received by sellers - Costs of sellers
D)Total surplus = Amount received by sellers - Costs of sellers + Amount paid by buyers - Value to buyers

Question

Quizplus · Accepted Answer

Total surplus is calculated by subtracting the cost incurred by the sellers to the value the buyers are willing to pay (i.e., value to buyers) from the total revenue generated from the transaction (i.e., amount paid by buyers and amount received by sellers). Thus, the correct formula is:
Total surplus = Value to buyers - Amount paid by buyers + Amount received by sellers - Costs of sellers.

Which Equation Calculates Total Surplus